About

Eamon Murphy was an English grad student before joining DailyFinance in 2011. As associate editor, he has written about Occupy Wall Street, the price of Legos, the value of artwork by Thomas Kinkade, and the human cost of making Apple products. In addition to U.S. culture, material and otherwise, he is interested in world politics, linguistics, and literature.

Just kidding about that second thing, I guess, because on Thursday the St. Louis Fed's new Center for Household Financial Stability said that, in fact, "Average household wealth in real terms, contrary to recent headlines, has not fully recovered; indeed it is only about halfway back to prerecession levels."

By which they mean less than halfway back: The average household is still only 45 percent as wealthy as it was before the crash, according to the data.

How can there be such a disparity between the two reports, just a few months apart? It seems the first conclusion took into account neither inflation nor population growth. So even though, by the last quarter of 2012, Americans had regained $14.7 trillion of the $16 trillion lost to the recession, the number of U.S. households increased by 3.8 million during the same period. And inflation, though it has averaged a modest two percent over the past five years, hasn't helped either. More people dividing up wealth with even slightly less purchasing power leads to a significantly dimmer economic picture.

And of course the recovery has been far from egalitarian. $9.1 trillion of the $14.7 trillion recovery -- 62 percent -- was due to higher stock-market wealth. "Stock wealth is unevenly held," the authors explain, "with the vast majority of stocks owned by a relatively small number of wealthy families. Thus, most families have recovered much less than the average amount." For another perspective on our unequal, stock market-driven recovery, see a recent study by Pew which found that from 2009 to 2011, the mean net worth of the top seven percent of households grew by 28 percent, while the lower 93 percent lost four percent of their average wealth.

Home values, not stocks, are the lion's share of wealth for middle- and lower-income households, and home prices are still down about 30 percent, "even after jumping nearly 11 percent in the past year," the new report says. Those who had higher-than-average concentrations of their wealth in housing -- younger, less-educated, African-American and Hispanic families -- took the biggest hit in percentage terms; these groups were also more vulnerable because of higher debt-to-asset ratios.

The report explains that damage to household balance sheets carries ominous implications for college outcomes, economic mobility, financial stability, and consumer spending. But since the wealthy do spend somewhat disproportionately -- roughly speaking, 40 percent of U.S. spending is done by 20 percent of Americans -- higher stock prices should lead to increased consumption.

The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.

The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.

The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.

The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.

Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.

Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.

The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.

Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.